Organic Broadcaster

Participants in the Organic Check-Off workshop at the recent MOSES Conference agreed on one thing: more money is needed for organic research. They disagreed, however, on whether or not the proposed check-off program is the best framework to handle research and promotion for the organic sector.

The workshop panel included Jim Goodman, a longtime organic dairy farmer who opposes a federal organic check-off program, and Nate Lewis, the farm policy director at the Organic Trade Association (OTA), which has led the drive for a national research and promotion check-off program for organic. The panel was moderated by Erin Silva of the University of Wisconsin-Madison.

“This is not your father’s check-off,” Lewis said at the start of the workshop, explaining that OTA learned from the failings of other commodity check-off programs, and designed the proposed organic check-off program to avoid those pitfalls. The “guiding light” will be the check-off program’s board, he said.

In the proposed program, the 17-member board would have 16 voting members—eight would be farmers and the other eight would be handlers, processors, distributers, or importers. Seven of the farmers’ seats would represent specific U.S. geographic regions. Nominees for these seats would be selected by ballot given to all farms in the region that are participating in the program either by mandatory or voluntary assessment. The Secretary of Agriculture would appoint board members from among the top two candidates in each region.

The eighth “farmer” seat would represent small-scale producers who voluntarily opt into the program. The proposal also has a provision to expand the number of board seats representing those small-scale producers if many of them choose to be assessed and participate in the program.

When his turn came, Goodman took issue with this board make-up, calling it unfair to small-scale producers. “Initially, anyone under $250,000 is not probably going to be on the board,” he said.

$250,000 is the revenue threshold for the proposed check-off program; producers and handlers with revenue above $250,000 would be assessed one-tenth of 1 percent of net organic sales (total gross sales minus the cost of certified organic goods or supplies). Those with revenue under that amount can choose to participate, be assessed at that same rate, and have full voting rights.

“This really isn’t an exemption,” Goodman said. “It’s a trigger. Once you pass that trigger, then you pay. So in the initial voting, if you’re not producing $250,000, you don’t get a ballot. But, next year, you may—you may have good weather, you may take on a few more acres, milk a few more cows—well then you’re involved in a check-off that you didn’t want to be in in the first place.”

Lewis pointed out that OTA heard over and over again from small-scale producers that they didn’t want the burden of paying into a check-off program. That’s why they designed the proposed program to exempt producers making less than $250,000. These producers may, however, opt in and then would be able to vote in the initial referendum to accept or decline the proposed check-off program.

He also clarified that only program participants would receive a ballot to vote for board representatives if the check-off program is approved.

“That’s part of the law for check-off programs in general,” he explained. “In order to have a vote for your representative, you need to be an assessed entity.”

Goodman asked how the program would obtain financial information about farms to ascertain if they make more than $250,000, pointing out that he lists sales of both organic and non-organic production on his farm’s Schedule F. He wondered if the program would be checking with certification agencies to verify organic sales.

“There’s no effort underfoot at all to try to get information from certifiers or IRS,” Lewis said. Reporting of organic sales would be left to producers and handlers. The check-off program board would have the right to investigate if there were reasons to think an entity lied about the value of organic sales, he added.

Lewis clarified that the $250,000 in revenue was the threshold for determining mandatory assessment. The assessment would be based on gross sales of organic products minus the cost of organic seed, feed, planting stock, inputs, but not labor or fuel.

Several farmers shared concerns about the broadness of the proposed program, which would cover all categories of organic production. A dairy farmer said she didn’t want to share promotion or research dollars with vegetable farmers, for example. She said farmers would have more control of how promotional money would be spent by sticking with a local producer group. She cautioned about involving the government in this type of regulation.

Goodman expressed similar concerns, saying “we’ve commodified organic.” He said the proposed check-off is too broad and too complex to work.

Others in the room were more hopeful. “We gotta keep an open mind,” said a dairy and grain farmer. “Let’s try to figure this out…. The Farm Bill’s not going to do too much for us.”

Lewis agreed. “Organic is very much in the crosshairs on this Farm Bill cycle, in particular the research infrastructure we’ve built over the last five years.”

A researcher from Iowa explained that she gets “zero dollars” for organic research. “To us, this looks like a way to get some much-needed research dollars into universities,” she added.

One longtime organic farmer came forward to say that the check-off will broaden the base of support for organic research, getting at many of the companies further down the supply chain that have been profiting from the organic label without giving anything back to help educate farmers or grow the sector. He added that if it doesn’t work after seven years, there will be another chance to vote on its existence.

“What I would have invested after seven years is seven-tenths of 1 percent—one-tenth of 1 percent per year for seven years,” he explained. “For me, I’m willing to do that, because when I look at the environmental threats this planet is under, I think that organic is part of the answer. I think we need to educate consumers as to why organic is important.”

Another farmer said he was in favor of the check-off, but thought there were too many “fuzzy details” that still needed to be worked out, especially with regards to determining net organic sales.

“I think this will be a very good thing for us,” this farmer went on to say. “As organic farmers, we are often in places we’ve never been before—we are leading the pack. This may not be your traditional check-off, but we are used to doing things differently. So we can make this work.” He said he planned to go home and read the entire rule and comment on it.

He’ll have a little more time to get through the 43-page proposed rule; the Agricultural Marketing Service announced Feb. 22 that it was extending the comment period to April 19, 2017. There were nearly 2,500 comments as of March 10.

To read and comment on the proposed rule, go to www.federalregister.gov and search for 82 FR 5746. That page still lists the original cutoff date of March 20. The date change is announced in the Federal Register at 82 FR 11855.

Once the comment period ends, the USDA will review comments and could make adjustments to the program. The final step will be a referendum on the proposal voted on by all organic certificate holders with revenue over $250,000 and those under that threshold who voluntarily choose to pay and participate.

Audrey Alwell is the communications director for MOSES and editor of the Organic Broadcaster.